Alcohol & Carbon

Europe deals blow to SNP Alcohol minimum pricing plan

Nicola Sturgeon’s plan to introduce a minimum price for alcohol in Scotland has suffered a potentially fatal blow after one of the European Court’s most senior legal officials ruled it risked infringing the EU’s free trade rules.

Advocate General Yves Bot found that fixing a legal price for alcoholic beverages could only be justified if the Scottish Government could prove that alternative means, such as increasing taxation, would not be a “suitable means of curbing excessive consumption”.

But he concluded that it was “difficult to justify” minimum pricing as it appeared “less consistent and effective” than increasing taxes and “may even be perceived as being discriminatory.”

The European Court of Justice in Luxembourg will issue its judgment later within the next six months, but it follows the Advocate General’s opinion in the vast majority of cases.

The Inner House of the Court of Session will then apply the ruling to Scottish circumstances. Despite alcohol duties being reserved to Westminster, the Advocate General’s ruling provides a clear steer that the plan is prima facie illegal in any part of a member state.

The flagship proposal to introduce a minimum price, initially set by Ms Sturgeon at 50p per unit, was passed by the Scottish Parliament in 2012 and had strong support from the police and medical profession, who argued it would help tackle Scotland’s binge drinking culture.

The SNP wanted to introduce minimum pricing to tackle bing drinking.

But the Scotch Whisky Association (SWA) brought legal action complaining the plan breached EU trade rules. It was also vigorously opposed by nine member states, including wine-producing nations such as France and Spain.

David Frost, the SWA’s chief executive, said: “We welcome the Advocate General’s opinion on minimum unit pricing of alcohol. The opinion encourages us in our long-held view that MUP is illegal when there are less trade restrictive measures available.

“We await the Court of Justice’s final ruling. It remains important to address alcohol misuse with a range of other measures of proven effectiveness. We will continue to work closely with the Scottish Government and other stakeholders on this.”

Graeme Young, a competition partner with law firm CMS, said the Advocate General had restated “well-established principles” of EU law and set a “very high bar” for the Scottish Government to justify the plan.

Michael Dean, partner and head of EU, competition and regulatory practice with the commercial law firm Maclay Murray & Spens LLP, said: "Should the Advocate General's opinion be followed by the court judgment in some months' time this would spell the end of the use of minimum per unit pricing of alcohol sold in Scotland to influence a reduction in consumption."

But Ms Sturgeon said: “Importantly, this initial opinion indicates it will be for the domestic courts to take a final decision on minimum unit pricing. The Advocate General finds that the policy can be implemented if it is shown to be the most effective public health measure available.

“As such, the legal process is ongoing and we await a final response from the European Court of Justice, before the case returns to the Scottish courts.”

Scots continue to drink almost a fifth more than in England and Wales and alcohol sales north of the Border increased last year despite SNP ministers introducing a range of other proposals designed to cut consumption, including a ban on multi-buy offers.

Nearly three-quarters of alcohol in Scotland was bought in supermarkets and off licences, rather than pubs or clubs, and more than half of alcohol sold in in shops cost below 50p per unit.

But Advocate General Bot found that alcohol minimum pricing “restricts trade within the European Union and distorts competition”.

He said that it could only be imposed if it could be shown that it “presents additional advantages or fewer disadvantages” than increasing alcohol taxes.

Scotland’s courts will have to identify the objectives of minimum pricing and the comparative merits of using general taxation instead, he said.

But he concluded: “Having regard to the principle of proportionality, it is difficult to justify the rules at issue, which appear to me to be less consistent and effective than an ‘increased taxation’ measure and may even be perceived as being discriminatory.”

The opinion was published after recent official figures showed that alcohol-related deaths in Scotland increased last year by 5 per cent to 1,152 deaths. It was the third year in a row the death rate had increased after a long-term decline.

In 2013, nearly 30 men out of every 100,000 died of alcohol-related diseases in Scotland, against a UK average of 19 deaths per 100,000.

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